As Premier Kathleen Wynne denounced the culture of entitlement at Ontario Power Generation, the electricity giant scrambled to do damage control in the wake of a critical audit that resulted in heads rolling.

“I am deeply concerned about what seems to be the culture in that organization, which is why changes are being made,” the premier said Wednesday, the day after three hydro executives were fired.

“We are going to bring in legislation to actually allow us to have more ability to control those compensation packages,” she said at Queen’s Park, referring to a new law to control payouts to public-sector brass.

Wynne, whose Energy Minister Bob Chiarelli was cajoled by reporters into saying “sorry” to hydro ratepayers for the utility’s excesses, has a daunting task to rein in management.

“This is a situation that has recurred over time, not just within the time that we have been in government. The culture is something that has been in place for some time,” the premier said.

Of the electricity generator’s 10,303 employees, 10 are in executive management, 214 are middle to senior management and 678 are frontline managers based across the province.

They are entitled to annual bonuses that range from 7.5 per cent of their base pay — in the case of a section manager — to 150 per cent for CEO Tom Mitchell, whose $1.72 million compensation package last year made him the highest paid public employee in Ontario.

“The government has little control over the management contracts in the broader public sector and the legislation to be introduced (in the new year) will give government control,” he said.

Still, Chiarelli refused to discuss OPG’s sacking Tuesday of chief financial officer Donn Hanbidge, who last year made $653,144 plus taxable benefits of $4,515, executive vice-president of strategic initiatives John Murphy, who earned $687,708 with taxable benefits of $138,307, and vice-president, assurance and chief audit executive Lou Pollieri, who took home $291,034 and taxable benefits of $1,296.

“I am absolutely not going to talk about HR issues, it would be totally inappropriate,” the minister said.

Negotiations with the three departed executives are ongoing and OPG has pledged to make public the settlements, which will likely be hefty because firings in the heat of political controversy are often costly.

When Ontario Lottery and Gaming Corporation CEO Kelly McDougald was sacked in 2009 by then-finance minister Dwight Duncan over an expense account scandal there, she sued for wrongful dismissal and won a settlement of $747,925 – almost double her annual $400,000 salary.

The Liberals announced McDougald’s payout on Christmas Eve in a bid to bury the news.

NDP Leader Andrea Horwath said the government has previously replaced boards of directors at eHealth Ontario and the ORNGE air ambulance service, though not yet at OPG.

“All of these organizations ultimately are the responsibility of Ms. Wynne and her cabinet ministers,” said Horwath.

At OPG, which generates 60 per cent of Ontario’s electricity, Lysyk discovered a pension plan funded with an employer-employee ratio of up to five to one — compared to the one-to-one formula for most public servants.

Executives are eligible for annual pensions of between $180,000 and $760,000, while the company must cover a $555-million pension deficit.

Against the tumult, Progressive Conservative MPP Lisa MacLeod (Nepean—Carleton) said her party also wants Chiarelli, OPG CEO Mitchell, and the utility’s chair, Jake Epp, fired.

But OPG was fighting back against one key criticism in the auditor general’s 444-page report that the company was rife with nepotism.

Lysyk said Tuesday she was “surprised” to learn 1,400 OPG employees reside at 700 addresses “indicating that they were most likely family members.”

On Wednesday, OPG’s Neal Kelly said it had “reviewed all of these cases” and “found no irregularities that would suggest inappropriate hiring occurred.”

“In more than half of them, the people were hired into Ontario Hydro, predating OPG. Of the more than 4,700 people hired into OPG since it became a company in 1999, we have identified about 350 who are related to someone,” Kelly said in an email.

“These are not reporting relationships. In the vast majority of cases this is one person in one department at approximately the same level within the organization (non-management) who happens to be related to someone else often in different departments. Not surprising given we operate in many small communities across the province and are often the largest employer.”

In terms of overall management compensation, Kelly pointed out payouts have actually decreased 9 per cent since January 2011.

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